SC: Mere expression “place of arbitration” doesn’t mean seat of arbitration

The Hon’ble Supreme Court, on 5th March 2020, in the matter of Mankastu Impex Private Limited v. Airvisual Limited pronounced that “Seat of arbitration” and “venue of arbitration” cannot be used inter-changeably. Mere expression “place of arbitration” cannot be the basis to determine the intention of the parties that they have intended that place as the “seat” of arbitration.

The Hon’ble Supreme Court observed that:

The seat of arbitration is a vital aspect of any arbitration proceedings. Significance of the seat of arbitration is that it determines the applicable law when deciding the arbitration proceedings and arbitration procedure as well as judicial review over the arbitration award. The situs is not just about where an institution is based or where the hearings will be held. But it is all about which court would have the supervisory power over the arbitration proceedings. (Para 19)

“Seat of arbitration” and “venue of arbitration” cannot be used inter-changeably. Mere expression “place of arbitration” cannot be the basis to determine the intention of the parties that they have intended that place as the “seat” of arbitration. The intention of the parties as to the “seat” should be determined from other clauses in the agreement and the conduct of the parties. (Para 20)

If the arbitration agreement is found to have seat of arbitration outside India, then the Indian Courts cannot exercise supervisory jurisdiction over the award or pass interim orders. (Para 25)

Section 11 of the Arbitration and Conciliation Act, 1996, has no application to “International Commercial Arbitrations” seated outside India. (Para 25)

Copy of judgement: Judgement_05-March-2020

-Adv. Tushar Kaushik 

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